India rebuffs US claim of solar power programme discriminating against foreign equipment makers

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Last Updated: Fri, Feb 08, 2013 05:30 hrs

India has hit back against a U.S. complaint at the World Trade Organization, saying that New Delhi's solar power programme does not discriminate against foreign equipment makers.

Tarun Kapoor, joint secretary at the Ministry of New and Renewable Energy, told The Wall Street Journal that India has not stopped imports of equipment and continues to comply with WTO rules.

He admitted that the Indian Government did insist that some projects get equipment from local vendors, but this was only for 'specific items'.

Kapoor said that this provision applied only to 'a few projects totaling 350 megawatts' awarded to Indian and overseas power producers last year.

Separately, Rajeev Kher, additional secretary at the trade ministry, said that the Indian government has received a notice from the WTO, and that it will reply within 10 days, the report said.

According to the report, this comes in response to a complaint filed by U.S. Trade Representative Ron Kirk, who said that a provision in India's solar energy program asks power producers to acquire equipment from within the country.

In a statement, Kirk said that the U.S. approached the WTO after failing to convince India to change its sourcing rules.

He added that India is offering subsidies to solar power producers to use India-manufactured solar cells and modules.

WTO rules prohibit measures that discriminate in favor of domestically produced goods.

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Kirk said that while the U.S. supports India's solar program, President Barack Obama's administration is committed to strengthening the American clean energy sector and preserving the millions of U.S. jobs it supports, the report said.

He said that India also has the right to protect its solar equipment makers, which are struggling to cope with cheaper imports from China, the U.S., Malaysia and Taiwan.

Indian manufacturers allege that equipment makers from these countries ship goods to India at 'predatory prices', as demand in the West has slowed, the report said.

According to the report, India's solar program envisages the installation of 20 gigawatts of solar capacity in several phases by 2022 to supplement electricity generated by thermal, hydroelectric and nuclear energy sources, as the country grapples with a severe shortage of electricity to run its factories and power its homes.